Hormel Foods Corporation · NYSE:HRL
Hormel Foods — Investor Day (June 2013)
38 slides from Hormel Foods's investor day presentation, Jun 25, 2013
Slide 1: Steve Binder
Steve Binder Executive Vice President and President, Hormel Business Units
Slide 2: Refrigerated Foods Org Chart
Refrigerated Foods Org Chart Hormel Refrigerated Foods Meat Products Foodservice Affiliated Foods Operations Fresh Pork Deli Retail/Club Farmer John Burke Precept Dan’s Prize 2
Slide 3: Refrigerated Foods Historical Results
Refrigerated Foods Historical Results Net Sales Segment Profit In billions In millions $293 $276 $4.2 $4.2 $3.8 $226 $229 $3.5 $3.4 $212 $3.3 $174 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012 3
Slide 4: Pork Cold Storage
Pork Cold Storage Million 800 Pounds 700 May 2013 +18% vs. 600 5-Yr. Avg. 500 400 5 Year Avg 2012 300 2013 200 100 0 4
Slide 5: U.S. Pork Exports
U.S. Pork Exports Jan.-Apr. 2013 Exports -15% YOY 5
Slide 6: Hog Price/Cutout
$75.00 $80.00 $85.00 $90.00 $95.00 $100.00 $105.00 4/1/2013 4/3/2013 4/5/2013 4/7/2013 4/9/2013 4/11/2013 4/13/2013 4/15/2013 4/17/2013 4/19/2013 4/21/2013 4/23/2013 4/25/2013 4/27/2013 4/29/2013 5/1/2013 5/3/2013 WCB Hog Price 5/5/2013 5/7/2013 5/9/2013 5/11/2013 5/13/2013 5/15/2013 5/17/2013 USDA
Slide 7: Foodservice Growth Pyramid
Foodservice Growth Pyramid Innovation High Growth Categories Focus Segments 7
Slide 8: Foodservice Industry Update
Foodservice Industry Update Revised 2013 Outlook and 2014 Projected Nominal Real Segment 2013 (P) 2014 (F) 2013 (P) 2014 (F) Restaurants/Bars 3.8% 4.1% 0.8% 1.0% Hotel/Lodging 4.0 4.0 1.0 1.0 College/University College/University 5.0 5.5 1.9 2.4 Business & Industry 4.0 4.0 1.0 1.0 Hospitals Hospital
Slide 9: Foodservice Focus Segments
Foodservice Focus Segments College & University Healthcare Focus Segments Convenience National Accounts 9
Slide 10: Foodservice Focus Segments
Foodservice Focus Segments 10
Slide 11: Foodservice High Growth Categories
Foodservice High Growth Categories We expect double digit revenue growth Hormel® Always Tender® Oven Roasted Pork Premium Bacon High Growth Categories Focus Segments Hormel® Natural Choice® Café H® brand brand 11
Slide 12: Foodservice Innovation
Foodservice Innovation Innovation High Growth Categories Focus Segments 12
Slide 13: Foodservice Innovation Platforms
Foodservice Innovation Platforms 2008 2010 2012 2013 13
Slide 14: 2013 Platform Launch
Chicken Thigh Meat Pork Shoulder St. Louis Ribs 2013 Platform Launch
Slide 15: Our People
Our People A Key Point of Difference 15
Slide 16: Steve Venenga
Steve Venenga Vice President, Meat Products Marketing
Slide 17: Our High Level Strategy
Our High Level Strategy Consumer Brand Growth Focused Driven Orientated 17
Slide 18: A Portfolio of Leading Brands
A Portfolio of Leading Brands Refrigerated Entrees
Slide 19: Millions of Households
Hormel® brand is growing and increasing number of multiple category HH’s Hormel® Brand Household Penetration Change (March 2008 to March 2013) + 4.5MM + 6% + 4.3MM + 12% Millions of Households + 2.9MM + 2.7MM + 2.9MM + 17% + 36% + 105% New HH's HH's Buying 2 or HH's Buying 3 or HH's buying 4 or HH's
Slide 20: Meat Products Sales High Value vs. Supply Chain
Meat Products Sales High Value vs. Supply Chain High Value 5-Yr. CAGR = 7% Supply Chain 5-Yr. CAGR = 4% 2007 2008 2009 2010 2011 2012 20
Slide 21: Consumer Insights Drive Growth
Consumer Insights Drive Growth
Slide 22: CURE 81 50th Anniversary Celebration
® th CURE|81 50 Anniversary Celebration Curemaster Reunion • Brought all six living Curemasters together for a Reunion in Austin • Dedicated two permanent plaques in their honor CURE 81® Fisher House Partnership • Donated $50,000 on behalf of the brand to the Fisher House organization • Donated East
Slide 23: Consumer Focused, Growth Oriented
Consumer Focused, Growth Oriented Hormel ® Hormel ® Natural Choice ® pepperoni party trays deli meats 5 Yr. CAGR 5 Yr. CAGR 5 Yr. CAGR + 10% + 16% + 13% CAGR calculated using Hormel Foods internal data for fiscal years 2007 and 2012. 23
Slide 24: We are meeting headwinds with a focused strategy
We are meeting headwinds with a focused strategy Hormel ® bacon Convenient Deli Meals 24
Slide 25: Growth Through Innovation
Growth Through Innovation Core brand building Innovation Consumer needs Consumer trends Big ideas & extensions Occasions Retail categories 25
Slide 26: Introducing Hormel REV
® Introducing Hormel REV ® Real meat and real cheese flatbread wraps, packed with 15 grams of protein or more, ready whenever, wherever 26
Slide 27: Consumers Need Whenever, Wherever Food More Than Ever
Consumers Need Whenever, Wherever Food More Than Ever… Yogurt and Bars are the Food of the Decade 8 of the 10 fastest growing foods Food for are eaten cold Immediate Consumption 90% of all snacks are eaten while doing another activity 27
Slide 28: Snacking Has Become the 4th Meal Occasion
Snacking Has Become the 4 th Meal Occasion “If I don’t snack I’d die! I “Snacks are mean I’m really active between school and sports life and death and I have to snack or I for me.” run out of energy.” 28
Slide 29: Few good options exist in the market today
Few good options exist in the market today…and consumers recognize the benefits of protein throughout the day 29
Slide 30: An opportunity to expand the consumer base for lunchmeat through teen snacks
An opportunity to expand the consumer base for the lunchmeat category through teen snacks Lunchmeat category is… Hormel Foods can.. • On trend • Fill this gap • Highly penetrated • Grow the category • Lacking in teen snacks • Relevant solutions • Proprietary science 30
Slide 31: Real Ingredients, Real Protein, Sustaining Energy
Real Ingredients Real Protein Sustaining Energy 31
Slide 32: Initial Feedback – Hormel REV has Broad Appeal
® ® Initial Feedback – Hormel REV has Broad Appeal Consumer Immediate Eaten Cold Guys Gals Kids Teens Occasion After Workout Studying Relax Portability On the Go At Work In Class In the Car 32
Slide 33: Initial Results are Positive
Initial Results are Positive • Sales rates are above category benchmarks • Category expansion • Trial and repeat numbers are in line with expectations • National distribution in place 33
Slide 34: Media is in Place to Drive Trial and Awareness
Media is in Place to Drive Trial and Awareness hun·gry 1. Feeling or displaying the need for food 2. Having a strong desire or craving Hormel ® REV ®…For those who are Hungry™
Slide 35: Two TV spots will be key drivers in the product launch
Two TV spots will be key drivers in the product launch 35
Slide 36: Hormel REV is a great opportunity to expand in alternate channels
® Hormel REV ® is a great opportunity for Hormel Foods to expand our presence in alternate channels C-Stores Campus Drug Stores • In test now • Initial test • Rolling out with results were National launch positive 36
Slide 37: Our High Level Strategy
Our High Level Strategy Consumer Brand Growth Focused Driven Orientated 37
Slide 38: Thank You!
Thank You! (Horie!)